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New Markets Venture Capital
The SBA's New Market Venture Capital Program is an appropriation by Congress
intended to create approximately 20 seed stage
(investments of $50,000 to $300,000 in a start-up) venture capital firms. Breaking
News.
The researchers reported [they] "knew of no other case outside of
Silicon Valley or Route 128 in Massachusetts where seed capital has been
created without direct public investment or a tax credit."
Best
Practices of State Sponsored Seed and Venture Capital Programs and
Alternatives to Direct State Funding
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Breaking News:
SBA Extends Time for Filing Application to May 29,
2001 and Publishes Time Table for Awards
SBA will
be extending the application deadline for the NMVC program, to 4:00 p.m. on May
29, 2001.
CDVCA
Issues Amended Guidance
SBA Extends Effective Date of Regulations to June
22, 2001
In the April 23rd Federal Register, the SBA publishes an extension of the
effective date of the interim final rule SBA published in the Federal
Register on January 22, 2001, 66 FR 7218, to June 22, 2001. The SBA
proposes to withdraw that interim final rule before it becomes
effective. The SBA further proposes to implement the NMVC program instead
with this new proposed rule. The SBA intends to complete its rulemaking and
publish a final rule based on this proposed rule, before the extended
effective date of the interim final rule and with sufficient time to
implement the NMVC program during fiscal year 2001.
The proposed regulations in this proposed rule are based in large
part on the regulations previously published in the interim final rule,
with several technical and substantive changes. The Supplementary
Information section of this proposed rule includes a discussion of
these technical and substantive changes as well as of the comments SBA
received on the interim final rule.
New Markets Venture Capital
Program: Effective Date Delay
New Markets Venture Capital
Program: NEW RULES
Tax Credits: On April 20,
2001 the Treasury Department is to issue regulations.
Venture Fund: Filing
Deadline Extended by SBA to May 21, 2001
In a follow-up release, the SBA told CDVCA the following:
Today's Federal Register announces that the NMVC application deadline has
been extended to May 21, 2001 at 4 P.M. SBA has informed us that, within the
next couple of weeks, it intends to replace the already-published Interim
Final Rule with a Proposed Final Rule that will incorporate both OMB's changes
and public comments received on the Interim Final Rule. There will then be a
two week public comment period on the Proposed Final Rule, to which SBA will
respond with a Final Rule. SBA plans to publish the Final Rule by the
application deadline (May 21). If SBA is unable to publish the Final Rule by
May 21, however, it will likely postpone the application deadline once more in
order to coincide with publication of the Final Rule.
New Markets Venture Capital
The SBA's New Market Venture Capital Program is an appropriation by Congress
intended to create approximately 20 seed stage
(investments of $50,000 to $300,000 in a start-up) venture capital firms. The
following links describe the program:
The SBA Program
Program Description and
Information
Notice of Funds
Availability
Comparison of Existing SBA Programs with New Markets Venture Fund Program
(key document) (word)
or (pdf)
New Markets
Venture Capital Q&A
SBA Estimates on Investment
Size and Rates of Return (sba
site)
Magnet Capital, the
SBA's prototype for New Markets Venture Capital Funds
New
Markets Venture Capital Program Act of 2000, a part of Public Law
106-554
Public Law No: 106-554. (H.R. 4577, Consolidated Appropriations Act 2001,
incorporates the provisions of several bills by reference. This includes
H.R. 5656 - Labor HHS Education Appropriations; H.R. 5657 - Legislative
Branch Appropriations; H.R. 5658 - Treasury Appropriations; H.R. 5666 -
Miscellaneous Appropriations - except section 123 relating to the enactment
of H.R. 4904; H.R. 5660 - Commodity Futures Modernization; H.R. 5661 -
Medicare, Medicaid and SCHIP Benefits Improvement and Protection; H.R. 5662
- Community Renewal Tax Relief and Medical Savings Accounts; H.R.
5663 - New Markets Venture Capital Program; and H.R. 5667 - Small
Business Reauthorization. The text of these bills is printed in the H.R.
4577 conference report: H. Rept. 106-1033 [text of conference report: CR
12/15/2000 H12100-12439].)
It is suggested that one use the html link, because of the length
of this law. (pdf:
Appendix H: HR 5663) (html)
New
Markets Tax Credits Statute (html)
Interim Final Rule - New Markets Venture Capital (html)
(pdf)
Stay of Interim Rule until April 23, 2001
New Markets Venture
Capital Application Form 2184 V3.9
New Markets Venture
Capital Application PART II EXHIBITS Form 2185 V3.9
New
Markets Venture Capital Program deemed redundant by Bush Administration and
will not be renewed in 2002
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State and Local Government Efforts to Provide Seed Capital
National
Association of Seed and Venture Funds
Growing
New Businesses with Seed and Venture Capital: State Experiences and Options
Building
State Economies by Promoting University-Industry Technology Transfer
Nurturing
Entrepreneurial Growth in State Economies
Building
State Economies by Promoting University-Industry Technology Transfer
State
Strategies for the New Economy
Business Capital Needs in
California: Designing a Program
Seed
and Venture Capital for Kansas' Entrepreneurs
(no case, outside Silicon
Valley or Route 128 where seed capital was created without direct pubic
support)
Kansas
Commercialization Corporations
THE
RETURN OF SEED CAPITAL (describing some of the prevailing wisdom about the
risk of very early stage investing)
Seed and
Venture Capital Formulation: Essential to High-Tech Business Job Growth
(one of many papers presented at the Wisconsin
Summit)
Business
Financing (Rhode Island) (at least 14 states support seed venture capital)
The
Role of Government in Regional High-Tech Development: The Effects of Science
Parks and Public Venture Capital
Directory
of State-Assisted Venture Capital Programs, 2000
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University Efforts to Provide Seed Capital
Cleveland's
Path to Regional Economic Advantage
Ohio State Technology
Partnerships: Benchmarking The Ohio State University and its Peer Institutions
The Bay Area Winning in
the New Global Economy: A Profile of Comparative Economic Performance
Industrializing
Knowledge : University-Industry Linkages in Japan and the United States
Ohio Technology Action Fund
Affinity Venture
Capital Initiative The Ohio State University
University
Initiatives
Boston University: Community
Technology Fund (the first successful university-based
venture capital fund)
Dot Edu (Faculty
Organized Seed Venture Capital)
Purdue University
(February 2000: starts venture capital seed fund to provide as much as
$250,000 to faculty-owned businesses that license a Purdue technology) (Trask
Venture Fund)
Texas Christian University: Neeley
School of Business (university-affiliated venture capital programs managed
by graduate and undergraduate students
University
Affiliated Venture Capital Funds (paper)
Big
Money on Campus Fortune Small Business, March 24, 2001 ("more than
100 other schools have or are creating such funds, up from about a dozen a
decade ago. Most are investing exclusively in high-tech and biotech startups
born of campus research")
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Missouri Economic Development Data and Research
State
Incentives to Promote Biotechnology
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The Fund's Theory of the
Business
- Assumptions
- Fund Size will be adequate, because fund size can be a limiting
factor. Low capitalization restricts the size of initial
investments, limits follow-on investments, and restricts the resources
available to support marketing and deal flow development. (RUPRI
BP99-2)
- The carry will be adequate be adequate for deal flow location and
entrepreneurial development. The more geographically restricted a fund,
the more resources must be devoted to developing and identifying deal
- Access to the syndication networks and reciprocity in referring deals
to each other for syndication are critical to firm performance. RECIPROCITY
AND POWER IN THE VENTURE CAPITAL MARKET; Venture
Capital Syndication and Firm Value: Entrepreneurial Financing of Grand
Junction Networks
- Deal Flow Will Be Adequate, from the following sources of deals or
entrepreneurs ( those individuals that are able of identifying an
opportunity that might generate economic value and then seek adequate
resources for its exploitation
- Technology
- Local Technology, especially the BioBelt
- Competing
in the New Millenium: Challenges Facing Small Biotechnology Firms
(report)
- HEARING
ON COMPETING IN THE NEW MILLENNIUM: CHALLENGES FACING SMALL
BIOTECHNOLOGY FIRMS WEDNESDAY, OCTOBER 27, 1999 (testimony of
Michael Horvath)
- California
Venture Capital Infrastructure Study
- Imported Technology
- There is a tendency to put too much emphasis on the portion of the region’s
new technological knowledge that comes from interactions with local universities
(i.e., universities located in the same metropolitan region). Here our
analysis of the more successful regions reveals something that may come as
startling news to those who persist in thinking about the
university-industry relationship in such simplistic ways: the nine
identified regions, it seems, draw most of the knowledge from outside
their regions. In other words, one of the things their local R&D
networks are exceptionally good at is learning from other regions of the
world. Fogarty, Michael Can
Older Industrial States Repeat the Success of Silicon Valley and Route 128?
- Business Concept Innovation
- De-Regulation
- Internet Content
-
I s there a gap between:
• a growing demand for digital content and an ongoing lack of capital
for some companies,
• fast developing financial markets with content as only one small area
of investment, and
• areas clustering content investment
Access
to Capital for the Content Industries
Added Assumptions:
- Technical Assistance Can be Converted Into Sustainable Competitive
Advantage for Portfolio Companies
- Insight as opposed to Knowledge
- Exit Strategies Can Be Found That Will Overcome The Fund's Inability
to Make Follow-on Rounds of Financing
-
Success will be based on how well his portfolio companies are able to
attract their next round of capital The
Venture Capital Edge (Forbes, February 23, 2001)(VC-backed deals in
the 1990s--roughly one-third of IPOs--outshone the general IPO market)
-
fund backed deals should be seen as more attractive, because of the
technical assistance embedded in portfolio firms
-
legal work, will result in lower contracting costs and greater investment
("by the book")
- How are new
players impacting venture capital investing in early stage
deals?
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Miscellaneous Venture Capital Links
Magazines
and Journals Related to Venture Capital/Private Equity:
Venture Economics
The
Role of Start-Up Financing in the United States, Europe, and Asia
VCExperts.com
VCapital
Garage
SBA
New Markets Fund: Key Points Regarding Community Oversight
SBA
New Markets Fund : Key
Program Points
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